Syntax: The Structure of ISO 20022 Messages

The syntax of an ISO 20022 message is foundational to its functionality, as it dictates how information is organized and communicated. Utilizing eXtensible Markup Language (XML), ISO 20022 allows for a flexible and hierarchical representation of data, making it easier for systems to interpret and process messages.

XML Tags

Each ISO 20022 message is encapsulated within specific XML tags. These tags serve as identifiers for different components of the message. For example, the tag '<FIToFICstmrCdtTrf>' represents a Financial Institution to Financial Institution Customer Credit Transfer. This intuitive naming convention facilitates understanding and memorization, allowing users to quickly identify the purpose of each tag.

Example of XML Tag Usage:

In this example, the '<GrpHdr>' tag contains several sub-tags that provide essential information about the message, such as the message ID and creation date.

Hierarchical Structure

The hierarchical nature of XML allows tags to contain sub-tags (child tags) and further nested tags, creating a structured layout. This hierarchy is crucial for organizing related data effectively.

Example of Hierarchical Structure:

In this structure, the '<CdtTrfTxInf>' tag contains multiple child tags that detail transaction information, such as payment IDs and amounts. The '<DbtrAgt>' tag further nests the<FinInstnId>tag, which identifies the financial institution involved.

XML Schema Definition (XSD)

The structure of an ISO 20022 XML message is defined by anXML Schema Definition (XSD)document. This schema serves several critical functions:

• Describes Allowable Document Content: The XSD outlines what elements can appear in a message and their relationships.
• Validates Data Correctness: By validating messages against the XSD, institutions can ensure that they conform to expected formats before processing.
• Defines Data Facets: The XSD imposes restrictions on data types, ensuring that only appropriate values are used (e.g., numeric fields cannot contain letters).
• Establishes Data Patterns: It specifies formats for various data types, such as dates or monetary amounts.

Example of XSD Validation:

An XSD might define that the '<IntrBkSttlmAmt>' element must always include a currency attribute (Ccy) and should be formatted as a decimal number. This ensures that any message containing this element adheres to these rules:

This snippet illustrates how the XSD enforces that any 'IntrBkSttlmAmt' must be a non-negative decimal with a mandatory currency code.

Conclusion

The syntax of ISO 20022 messages, characterized by its use of XML tags and hierarchical structures defined in XSD documents, is essential for effective communication in financial transactions. By providing a clear framework for organizing data, ISO 20022 enhances interoperability among financial institutions and ensures accurate processing of messages across various platforms. Understanding this structure is crucial for professionals engaged in financial messaging systems.

Comping up next: ISO 20022 Semantics

Learnings:

1. A Beginner's Guide to Cross-Border Payments Course Complete notes: https://topmate.io/learn/1257621
2. Ebook on ISO20022: https://lnkd.in/gVRD6BuZ
3. Cross border payments course: https://lnkd.in/gkSsupNi
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